POLDER (POLarization and Directionality of the Earth's Reflectances) is a new instrument devoted to the globalobservation of the polarization and directionality of solar radiation reflected by the Earth surface-atmosphere system. This radiometer has been on board the Japanese ADEOS platform since August 1996. This paper describes the main algorithms of the POLDER 'Earth radiation budget (ERB) & clouds' processing line used to derive products on a routine basis in the early phase of the mission. In addition to the bidirectional reflectance and polarization distribution functions, the main products will be the cloud optical thickness, pressure (from two different methods) and thermodynamic phase. Airborne POLDER observations support the present algorithms for the cloud detection and the derivation of cloud properties.